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Risk-taking for others under accountability

  • Pahlke, Julius
  • Strasser, Sebastian
  • Vieider, Ferdinand M.
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    We let subjects take risky decisions that affect themselves and a passive recipient. Adding a requirement to justify their choices significantly reduces loss aversion. This indicates that such an accountability mechanism may be effective at debiasing loss aversion in agency relations.

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    Article provided by Elsevier in its journal Economics Letters.

    Volume (Year): 114 (2012)
    Issue (Month): 1 ()
    Pages: 102-105

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    Handle: RePEc:eee:ecolet:v:114:y:2012:i:1:p:102-105
    DOI: 10.1016/j.econlet.2011.09.037
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    1. Fellner, Gerlinde & Sutter, Matthias, 2005. "Causes, consequences, and cures of myopic loss aversion - An experimental investigation," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 171, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    2. John A. List, 2003. "Neoclassical Theory Versus Prospect Theory: Evidence from the Marketplace," NBER Working Papers 9736, National Bureau of Economic Research, Inc.
    3. Matthias Sutter, 2008. "Individual behavior and group membership: Comment," Working Papers 2008-23, Faculty of Economics and Statistics, University of Innsbruck.
    4. Wakker,Peter P., 2010. "Prospect Theory," Cambridge Books, Cambridge University Press, number 9780521748681, November.
    5. Mohammed Abdellaoui, 2000. "Parameter-Free Elicitation of Utility and Probability Weighting Functions," Management Science, INFORMS, vol. 46(11), pages 1497-1512, November.
    6. Charness, Gary & Jackson, Matthew O., 2009. "The role of responsibility in strategic risk-taking," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 241-247, March.
    7. Sutter, Matthias, 2007. "Are teams prone to myopic loss aversion? An experimental study on individual versus team investment behavior," Economics Letters, Elsevier, vol. 97(2), pages 128-132, November.
    8. Adam Booij & Bernard Praag & Gijs Kuilen, 2010. "A parametric analysis of prospect theory’s functionals for the general population," Theory and Decision, Springer, vol. 68(1), pages 115-148, February.
    9. Kristoffer W. Eriksen & Ola Kvaløy, 2010. "Myopic Investment Management," Review of Finance, European Finance Association, vol. 14(3), pages 521-542.
    10. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
    11. Gary E. Bolton & Axel Ockenfels, 2010. "Betrayal Aversion: Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States: Comment," American Economic Review, American Economic Association, vol. 100(1), pages 628-33, March.
    12. Kobberling, Veronika & Wakker, Peter P., 2005. "An index of loss aversion," Journal of Economic Theory, Elsevier, vol. 122(1), pages 119-131, May.
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